On the Record: All that Glitters Isn't Tax Exempt
3. Debt-financed property presents a whole other array of UBIT issues, again, beyond the scope of this article. If an exempt organization is the beneficiary of an asset on which there is a mortgage it should be aware of the interplay between the debt-financed characteristics and the rules governing UBIT.
Kathleen Stephenson is of counsel with the Philadelphia office of Pepper Hamilton llp. Lisa B. Petkun is a partner in the Tax Department of Pepper Hamilton. “On the Record” keeps readers up to date on the latest tax and planning issues pertaining to fundraising endeavors and charitable organizations.